A production inventory model for deteriorating products with selling price dependent consumption rate and shortages under inflationary environment

Abstract

In today's highly competitive market, every business needs a high investment which is directly correlated to the return of the investment. The business will not be advantageous, if the return rate of investment is lesser than the inflation rate. In almost developed models, it is believed that distinct costs related with inventory systems will be constant all the time but in reality it is not true. As the time increases, inflation becomes a considerable function and the costs related to the model differ. This research article presents a production inventory model for deteriorating products with selling price dependent demand and shortages under inflationary environment. The production rate considered here is a function of occurring demand. The shortages during stock out assumed to be partially backlogged. The intention of this study is to compute the optimal value of production period and shortage period. A solution procedure and numerical example are presented to illustrate the implementation of proposed study. A sensitivity analysis with respect to distinct system parameters is also presented to check the stability of the optimal solution.

Production Inventory Models With Integrated Stock and Price Dependent Demands for Deteriorative Items

“…Retail pricing and cycle time have a direct impact on profit. According to Singh and Rastogi (2018), in an inflationary climate, a production inventory model for degrading items may be used to predict demand and supply shortfalls. The pace at which a product is produced is determined by the amount of demand.…”